Market Trends of Asia-Pacific Ammunition Industry
Military Segment is Expected to Dominate the Market During the Forecast Period
- The military segment dominates the Asia-Pacific ammunition market. The dominance is due to the increased procurement of ammunition by the armed forces to subdue the threats arising from terrorism, territorial conflicts, and geopolitical tensions. The countries are procuring artillery and mortar systems to safeguard their borders against illegal trespassing and several forms of trafficking, generating demand for ammunition. Increasing defense expenditure and expanding military forces from countries such as India, Japan, and China boost the market's growth. In 2022, China and India were the world's second and fourth-largest defense spenders, with a defense budget of USD 292 billion and USD 81.4 billion, respectively.
- For instance, in October 2022, Nammo AS, a Norway-based ammunition manufacturer, agreed with South Korea's Hyundai Rotem to develop new 120-mm ammunition for the K2 Black Panther main battle tank (MBT). Furthermore, in January 2023, the Indian Army requested to indigenously source 5,000 9×19-mm machine pistols as an emergency procurement via the Fast Track Procedure (FTP) of the Defense Acquisition Procedure for an estimated USD 6 million. Thus, growing expenditure on strengthening military forces and procuring advanced weapons drive market growth across the region.
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India to Showcase Highest Growth During the Forecast Period
- India is estimated to show significant growth in the market during the forecast period. The growth may attributed to the rising defense expenditure, growing terrorism, and cross-border conflicts among neighboring countries, such as China and Pakistan. The government is focusing on procuring new advanced weapons with enhanced lethality, driving the demand for ammunition in India. Growing terrorist activities and increased tensions between India and China along the Line of Control (LOC) are leading to increasing expenditure on the defense sector and strengthening defense capabilities.
- The country has a large group of domestic and international suppliers that compete intensely to supply arms and ammunition to the government. Major global companies like Lockheed Martin Corporation and BAE Systems and domestic suppliers like Kalyani Group, Tata Advanced Systems Limited, and Mahindra Defense Systems Ltd are prominent players in the Indian defense market. The government-owned Defense Research Development Organization (DRDO) is the largest supplier of weapon systems operating in the government sector of the country. For instance, in November 2023, India announced its plans to procure 200 new mounted howitzers equipped with 105-mm guns to boost its mobile firepower in high-altitude border areas like the Line of Actual Control with China. Thus, rising investment in procuring next-generation rifles and ammunition drives the market's growth across the region.
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